A fresh approach to selling domain names — Undeveloped takes

Domain name marketplace is trying to improve the process of buying and selling domain names.

If you aren’t happy with current domain name marketplaces, the simplest thing to do would be just to complain. On the other end of the spectrum, you could build your own competing domain name marketplace.

That’s exactly what the founders of Undeveloped.com decided to do.

Co-founder Reza Sardeha explained that he was unhappy with existing marketplaces and wanted to come at domain selling from a fresh perspective.

“From a seller perspective, we wanted to make domain trading easier,” he stated. “We wanted a platform that was solely based on selling, rather than monetizing. We really didn’t see anything out there that would allow you to become a good seller.”

Once Undeveloped launched in 2014, the firm realized it needed to put much more focus on domain buyers.

“If you want to build a very liquid marketplace, you ought to start counting the buyer side,” stated Reza. “Without buyers you can have the most amazing domains, but you won’t sell them.”

So Undeveloped worked to create a more transparent marketplace that would make buyers comfortable acquiring domains on the secondary market.

For example, buyers can see the seller’s name or firm name on for-sale landers. The landers also include information regarding pricing and the process of acquiring the domain.

While listing your name on the sales page and setting fixed prices is optional, Undeveloped has data to back up the sales lift serllers get from adding these.

Additionally, since 70%-80% of negotiations don’t lead to an agreement on price, the firm is creating content to educate buyers regarding the value of domain names.

Reza stated the firm also examined why people failed to submit offers on domains in the first place. Its original landers asked for an offer upfront. This was a major deterrent to buyers.

“People would ask us ‘if I make an offer, how long is it binding?'” he stated. “Some people would read our entire terms of use and then come back to us saying ‘you have this term in your terms of service, can I just get a price first?'”

To get buyers to show up to the marketplace, Undeveloped researched where businesses go when they need a firm or product name.

Since many of these users search for the name they’re interested in, Undeveloped focused on SEO for its for sale landers. As a result, a quarter of all leads clients receive are the result of someone finding their “for sale” page through a search engine.

The landers also have a title tag noting the domain is for sale, as opposed to parked pages that promote the topic instead.

In the future, sellers will have the option of counting custom content, stats, payment options, etc. on the landing page.

Undeveloped is also innovating on the escrow side. For some ccTLDs such as .nl, it can instantly transfer domains to its own registrar upon receipt of payment. This allows it to pay out sellers quickly.

While Undeveloped is still much smaller than established marketplaces like Sedo and Afternic, it continues to find ways to differentiate itself. It boasts 21 million names for sale, but the majority of these are not directly listed with the service. The firm crawled for unused domains and then included them in its database. When a client inquires regarding one of these domains, the firm reaches out to the owner to engage them. 80% of the time, they can bring the domain owner to the table.

Like most of its competitors, Undeveloped charges a 15% commission on sales, counting escrow fees.

The firm raised a $350,000 seed round regarding seven months ago and right now employees 17 full-time equivalents.

Creating a marketplace is hard. It’s a chicken and egg problem. But Undeveloped seems to be taking some innovative approaches and is a firm to watch.